College Loans by States Face Fresh Scrutiny

The New York Times reports:

When Iowa set up a corporation to make student loans more available, it hoped to expand access to college. Now state officials are investigating whether the corporation’s aggressive practices to get business help explain why Iowa’s college graduates have the nation’s second-highest debt burden per student.

The nonprofit Iowa Student Loan Liquidity Corporation, created in 1979, has become the dominant student lender in the state, with 400 employees and $3.3 billion in outstanding loans. Its officials, in recently disclosed e-mail messages, emphasized “continued ‘hypergrowth’” and benefits of “an aggressive, offensive strategy to bring in new loan volume.”

Some Iowa lawmakers, after hearings this fall, threatened to strip it of its authority to issue tax-free bonds, raising its costs, and the attorney general is investigating its business practices and governance.

It's time to separate education from state.